According to Ayn Rand, all concepts are derived from facts including the concept “value.” All concepts, including the concept of value, are aspects of reality in relationship to individual men. Rand asks what fact or facts of reality give rise to the concept of value. She reasons that there must be something in perceptual reality that results in the concept value. She argues that it is only from observing other living things (and oneself introspectively) in the pursuit of their own lives that a person can perceive the referents of the term value. For example, people act to attain various material and other goods and determine their choices by reference to various goals, ends, standards, or principles. For Rand, the concept of value depends upon and is derived from the antecedent concept of life. It is life that entails the possibility of something being good or bad for it. The normative aspect of reality arises with the appearance of life.

Ayn Rand defined value as that which one acts to gain and/or keep. A value is an object of action. In this sense we can say that everyone pursues values. This includes any goal-directed behavior. The term, value, thus can refer in a general, neutral, or descriptive sense to what is observable. We see people going after things. Initially, we do not consider whether or not people are properly employing their free will when they pursue their values. As children, we first get the idea of value implicitly from observation and introspection. We then move from an initial descriptive idea of value toward a normative definition of value that includes the notion that a legitimate value serves one’s life. Because reality is the source and standard of rational values, exposure to reality is the means by which we discover them.

The first generic and descriptive idea of value ties value to reality and is a precondition to an objective and normative perspective on value. The second, narrower way of looking at value adds the words “which furthers one’s life” and the idea of the proper and rational use of a person’s free will. The second definition or Objectivist concept of value is a derivative or inference from the first. The first view of value comes before the knowledge of life as the standard of value. The second view of value gives normative guidance and provides an objective standard to evaluate the use of one’s free will.

Each derivative value exists in a value chain or network in which every value (except for the ultimate value) leads to other values and thus serves both as an end and as a means to other values. A biological ends-means process leads to the ultimate end of the chain which, for a living entity, is its life. For a human individual, the end is survival and happiness and the means are values and virtues that serve that end. Values and virtues are common to, and necessary for, the flourishing of every human person. However, each individual will require them to a different degree. Each man employs his individual judgments to determine the amount of time and effort that should go into the pursuit of various values and virtues. Finding the proper combination and proportion is the task for each person in view of his own talents, potentialities, and circumstances. Values and virtues are necessary for a flourishing life and are objectively discernable, but the exact weighting of them for a specific person is highly individualized.

In order for a chain of values to make sense, there must be some end in itself and ultimate value for which all other values are means. An end in itself is something that we pursue for its own sake rather than pursuing it for the sake of something else. An ultimate value is sought for its own sake and for the sake of which we pursue everything else. An infinite progression or chain of ends and means toward a non-existent end is a metaphysical and epistemological impossibility. All must converge on an ultimate value.

An ultimate value is necessary if a person is to make rational choices. One ultimate value is required for a person to decide how to act. Evaluation necessitates teleological measurement in order to make our potential values commensurable. An ultimate value is needed by which a person can decide to apportion his time and effort and to judge the relevant amounts and proportions of each. Teleological measurement is required in order to establish a graded or ordinal relationship of means to ends. A person must be able to make various values, in the form of means and ends, comparable in order to decide what to do in inevitable cases of conflicts. When different values come into conflict a person refers to a higher value in order to resolve the conflict.

An individual’s task is to choose from among numerous values to find the most appropriate for himself. A person must make specific choices with respect to his career, his relationships, and so on. A hierarchy of values helps people make judgments regarding what to do or to pursue. To do this, an individual must assign a weight, either explicitly or implicitly, to his values. Values need to be weighted or ranked in terms of ordinal numbers. A man requires a prioritized enumeration of values. He must judge the ultimate contribution to the value of his life that exists at the apex of his hierarchy.

A man needs ideas regarding what to pursue in life and ideas with respect to the required means to get what he is seeking. Each person must form values, hierarchize them, and pursue them. A man must expose himself to many aspects of reality in order to discover the things that he loves (i.e., his values). After a man immerses himself in observational reality he must then choose to delimit them to those that most excite and interest him and ignite his soul. He needs to identify the crucial indispensable values to his life and distinguish them from lesser values and non-values. He requires an explicit value hierarchy and should organize his time, effort, and lifestyle around that hierarchy. A person’s top values get a disproportionate amount of his attention, the next highest level of values gets the next call, and so on down his hierarchy. By eliminating non-values, filling one’s life with things that he loves, and doing those things in the order in which he loves them, a man is on track to accomplish what he wants to do with his finite life. Of course, he should select and pursue values that are rational and metaphysically appropriate for him. Whether or not the means chosen to achieve one’s values will be sufficient is determined by objective reality.

To be a value means to be good for someone and for something. Life is one’s fundamental value because life is conditional and requires a particular course of action to maintain it. Something can be good or bad only to a living organism, such as a human being, acting to survive. Man’s life is the ultimate value and the standard of value for a human being.

A man must make value judgments in order to act. He must choose in the face of an alternative that having or not having the value makes some difference to him. The difference it makes is the alternative he faces. A value exists in a chain of values and must have some ending point. There must be some fundamental difference or fundamental alternative that marks the cessation of one’s value chain. There must be some basic alternative that makes no additional difference or, stated differently, a fundamental difference that makes all the difference. It is his life, the process of self-sustaining action, that is the fundamental alternative at the end of a man’s value chain. One’s life is the alternative that underpins all of his evaluative judgments. It is his ultimate value and the proper end of all the valuer does. One’s life is not pursued for the sake of anything beyond itself. It is gained and maintained through a constant process of self-sustaining action.

The fundamental fact of reality that gives rise to the concept of value is that living beings have to attain certain ends in order to sustain their lives. The facts regarding what enhances or hinders life are objective, founded on the facts of reality, and grounded in cognition. The act of valuation is a type of abstraction. It is a product of the process of concept-formation and use. Objective values are identified by a process of rational cognition. This should not be surprising because people do think, argue, and act as if normative issues can be decided by considering the facts of a situation.